Tennessee Business Litigation Lawyers Blog

Articles Posted in Real Estate Litigation

Recovering Attorney’s Fees in Tennessee Partition Cases

Published on: April 28, 2016 | by J. Ross Pepper

Any joint owner of real estate has the right to file a lawsuit to have the property sold and to have the proceeds distributed or to have the property divided (if that is even possible which, in my experience, most of the time it is not). So, who pays the attorney’s fees in a partition case? Does the owner who hires the lawyer who files the partition case get to recover the attorney’s fees which that owner incurs? What about attorney’s fees incurred by joint owners who did not file the partition case, but who hired different lawyers and who also incurred attorney’s fees?

In Tennessee, the trial court may award attorney’s fees out of the “common fund” to any party who incurred legal fees in the partition case. The “common fund” refers to the money received when the property is sold. That authority is granted in a statute, T.C.A. §29-27-121.

In a 1968 opinion, the Supreme Court of Tennessee, in the case of Montgomery v. Hoskins, ruled that the Tennessee statute which provides Tennessee trial courts with discretion to award attorney’s fees in partition cases is not to be interpreted as permitting the trial court to award attorney’s fees to an owner who hired the attorney who filed the partition case while denying them to another owner who hired his or her attorney to represent him or her after the partition lawsuit was filed.

In Hoskins, one owner hired a lawyer to file a partition case to have property which he owned with another person sold. The other person, a co-owner, hired his own lawyer after the partition case was filed.

Valuing Residential Property Which Has Commercial Potential in Tennessee Condemnation Cases

Published on: March 21, 2016 | by J. Ross Pepper

In Tennessee eminent domain cases, also referred to as condemnation cases, it occurs sometimes that the governmental authority seeks to take property which is currently used and zoned as residential, but which has the potential for commercial development. It is also frequently the case that the property has a substantially higher value as commercial property than as residential property.

In such cases, where the property is zoned residential, but has the potential for re-zoning to commercial and for commercial development, is the landowner stuck with the value of the property as residential property? The answer to that question is no.

A property owner in Tennessee whose property is subject to a condemnation case may well be able to recover the commercial value of the property rather than just the residential value of the property. This is so even if the property is zoned residential at the time of the taking.

Here are summaries of three cases that are helpful if you are in a condemnation case and believe that your residential property has the potential to be rezoned for commercial use. Continue reading

Unfairness and Favoritism Do Not Equal Undue Influence

Published on: March 12, 2016 | by J. Ross Pepper

Two fairly recent Tennessee undue influence cases prove a point: To win an undue influence case, the plaintiff (or contestant if it is a will contest) must prove more than mere unfairness or favoritism.

Both cases involved alleged undue influence with respect to deeds for land. In the first case, Bunch v. Bunch, a mother owned 35 acres of land. While the mother was alive, she deeded about half of the acreage to her daughter. At her death, the other half of her land passed to her daughter and son equally.

After the mother passed away, the daughter brought a partition action to have the land which was left to her and her brother jointly sold and the proceeds divided. The son filed a counterclaim against the daughter, his sister, in which he alleged that the deed wherein his mother transferred half of her land to her daughter was the result of the undue influence of the daughter.

Recovering Attorney’s Fees Pursuant to a “Prevailing Party” Contractual Provision

Published on: February 26, 2016 | by J. Ross Pepper

Under Tennessee law, which follows the “American Rule,” a winning party cannot recover its attorney’s fees from the losing party. There are a couple of exceptions to that Rule. One of those exceptions is that a party can recover its attorney’s fees if there is a contractual provision whereby the parties agreed to the same.

Many contracts do contain what are referred to as “fee shifting” clauses or “attorney’s fees” clauses. Frequently, in breach of contract cases, there is a contractual provision involved which provides that the prevailing party is entitled to recover its attorney’s fees and expenses from the other party.

What if a party does not have an outright win, but only wins on some issues? Whether the case involves a breach of contract or real estate dispute, both sides are most likely to allege numerous claims and defenses and to put many issues before the court for resolution.

A recent case involving restrictive covenants in a subdivision plat dealt with the question of whether parties who prevailed on some of their claims, but not all of them, were prevailing parties. In addition to the many other provisions in the restrictive covenants in the plat, there was a provision which stated: “In the event litigation is implemented for the enforcement of these covenants, the prevailing party shall be entitled to an award of attorney fees as additional damages.”

Recovering Pre-Judgment Interest in Tennessee Breach of Contract Cases

Published on: January 2, 2016 | by J. Ross Pepper

Pre-judgment interest is the interest which accrues from the date an obligation is due to the plaintiff until the day the judge or jury enters a verdict in favor of the plaintiff.

Given that a breach of contact case or other commercial litigation case may take a year or more to get to the point where a verdict is rendered once the case is filed, pre-judgment interest can be substantial in many cases. Consider also that, for various reasons, many cases are not filed until months, even years, after the debt was due to the plaintiff.

Where the parties in litigation do not have a contract about the amount of any interest due, as is often the case, T.C.A. §47-14-123 allows a judge or jury to award pre-judgment interest at any rate not in excess of ten percent (10%). Under Tennessee case law, if you are relying on the statute for pre-judgment interest, you can never receive anything more than simple interest. You cannot compound statutorily awarded pre-judgment interest.

Partition Lawsuits in Tennessee: Practical Considerations

Published on: December 20, 2015 | by J. Ross Pepper

Where parties own real property jointly, and one party has announced his or her intention to sell, the most sensible approach for the other owner or owners to take is to cooperate with the owner who wants to sell. If co-owners can cooperate, they can save themselves attorneys’ fees and a substantial amount of hassle. The key agreements which co-owners must reach are the agreement on the terms of the sale and the agreement on how the net sales proceeds will be divided.

Many times, it is not possible for co-owners to agree on how to go about selling the property. The reasons are many.

Once I take on a partition case, I will first try to determine whether any type of agreement can be reached regarding the sale of the property before I file a partition lawsuit. In most cases, by the time I am hired, there is no hope of agreement between the co-owners, at least until a partition action is underway and the other co-owners are forced to accept the reality of the situation.

Iron Stakes Win Boundary Line Dispute Over Deed Descriptions

Published on: December 5, 2015 | by J. Ross Pepper

Any Tennessee boundary line case will most likely turn into a classic “battle of the experts” where both parties use a surveyor as their expert witness. In cases where both parties have reputable surveyors, how does the court pick the winner?

A boundary line case which recently reached the Court of Appeals of Tennessee provides some solid insight into how a Tennessee court will approach and decide a boundary line dispute where two surveyors come to different conclusions. The case, Haddad Family Partnership v. Pouncey, involved the following facts:

The Pouncey property, about 430 acres of farmland, lay directly to the north of the Haddad property, about 208 acres of farmland
A field road was located on the north part of the Haddad property, and the Haddad family always considered the field road and everything south of it to be their property
According to Pouncey, the field road, over the years, had been moved north and was located on his property
A dispute arose and both parties hired surveyors
The Haddad family used a surveyor named Erwin
Pouncey used a surveyor named Van Boals
Erwin concluded that the field road was on the Haddad property
Van Boals determined that the field road was on the Pouncey property
The discrepancy between the surveys of Erwin and Van Boals was significant – – – almost 50 feet

To determine the correct boundary line, Erwin did the following:

He examined the deeds of the Haddad property and adjoining properties and created a computer generated title map based on the legal descriptions of the properties in the deeds
He discovered that the latest Haddad deed was incomplete because it included a specific bearing and distance for only three sides of the Haddad property
He determined that, because of that, the Haddad deed contained an error of closure of 622 feet
Even though there was an error of closure, Erwin determined that each of the deeds from 1910 forward called for the north line of the Haddad property to be common with the south line of the Dunlap Estate which was the predecessor to the Pouncey property
Erwin went to the Haddad property to find any markers, and he found several iron stakes
Erwin found two iron stakes which marked the northwest corner of the Haddad property and the southwest corner of the Pouncey property
Erwin decided to survey the Pouncey property (in addition to the Haddad property) because the latest Haddad deed was incomplete
The Pouncey deed called for an iron stake in a lake, and Erwin located it with a metal detector in three feet of water

Lessons from Daniel Kahneman’s Thinking Fast and Slow

Published on: November 8, 2015 | by J. Ross Pepper

Daniel Kahneman’s bestseller, Thinking Fast and Slow, is not only a fascinating read, but also, it contains insights that can be an immense help to clients in making decisions about their cases, choosing lawyers, negotiating settlements, and evaluating the advice of their lawyers. Here is what clients (and trial lawyers) can learn from the book:

Lesson One: Intuitions are not as Reliable as We Think

With objective evidence and data, Mr. Kahneman proves the point that many people are overconfident and place too much faith in their intuitions. I know from experience that lawyers are just as susceptible to this way of analysis as any other group. On many occasions, I have heard misguided advice from lawyers that was the result of their relying on some kind of intuitive impulse rather than spending time and effort evaluating a case from many angles (which takes time), bouncing the facts of the case off of several other people, including lawyers and non-lawyers (especially important where a jury trial is involved), and seeking and studying objective data (like published case law).

Lesson Two: Jury Outcomes are Unpredictable

When I first became a trial lawyer 25 years ago, I participated in the National Institute of Trial Advocacy and read extensively about the decision making process of juries. What I learned, and was taught, by seasoned trial lawyers and psychologists, is that most juries will ignore the law, the jury instructions, to get to the result which they think is fair. In my trial practice, I have found that to be true.

After reading Kahneman’s book, I realized that there is a whole other layer in the jury decision making process of which we have to be aware. You can’t help but be persuaded by Kahneman that, even the people who make decisions, like jurors, do not understand fully why they decided something the way they did. The point Kahneman makes, and makes well, is that we can all be primed to make decisions in a certain way without even knowing that we have been primed or what has primed us.

Condemnation Case: Incidental Damages Appropriate Where Taking Affected Separate Tract Owned by Same Persons

Published on: October 5, 2015 | by J. Ross Pepper

In a recent eminent domain case, the Court of Appeals of Tennessee upheld a jury verdict for incidental damages caused to one tract of a dairy farm by the condemnation of part of another, but separate, tract of the dairy farm. The case is important for condemnation lawyers in Tennessee because the State’s argument that the property owner was not entitled to incidental damages caused to the tract which was not condemned was unsuccessful.

Here are the facts:

The Owners owned two separate tracts of land, a northern tract and a southern tract
The Owners operated a dairy farm
The southern tract was the site of the dairy farm operations and where manure accumulated
The northern tract was unimproved and was used for the disposal of a large percentage of the manure which was generated
The manure was taken from the southern tract to the northern tract via a tractor
The State filed a petition of condemnation to acquire a 16 acre portion of the northern tract to realign a highway
The State did not seek to take any of the southern tract
As a result of the realignment of the highway, it would no longer be possible to transport the manure from the southern tract to the northern tract via tractor
The manure would have to be transported by a “wet system” which would involve a pipe

A jury trial was held to determine the Owners’ damages. Under Tennessee law, besides being entitled to the value of the land taken by the State, a landowner is also entitled to incidental damages. Incidental damages in a condemnation or eminent domain case consist of the amount of the diminution of the value of the land because of the taking. Under Tennessee law, incidental damages are the lesser of the reasonable cost of repairing or curing the damage caused by the taking or the difference between the fair market value of the property immediately before and after the taking.

Does the Parol Evidence Rule Apply to Statements Which Are the Basis for a Claim or Defense of Fraud?

Published on: September 25, 2015 | by J. Ross Pepper

In Tennessee breach of contract cases and fraud and misrepresentation cases, it is quite possible for the parol evidence rule to come into play. (The basics of the parol evidence rule are explained in a previous blog.) It is also quite possible, in such cases, for the parol evidence rule to be outcome determinative.

A review of the relevant Tennessee case law reveals that Tennessee courts have been inconsistent in applying or not applying the parol evidence rule in cases where allegations of fraud are made, either as a defense, as a claim, or as a counterclaim.

If you want to understand the rules regarding the application of the parol evidence rule in cases where allegations of fraud (now called misrepresentation) are made, then digest the following five cases. In the first three cases, a party relied on a statement made before the contract was signed (parol evidence) to establish a misrepresentation; the other party claimed that such statement was inadmissible under the parol evidence rule; and, the court ruled that the evidence of the statement was not barred by the parol evidence rule. The same things happened in the second two cases except, in those cases, the courts held that evidence of the misrepresentations was barred by the parol evidence rule.

CASES ALLOWING PAROL EVIDENCE TO PROVE A MISREPRESENTATION Continue reading

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